Unsurprisingly, the US is even more litigious: 75% of US
respondents faced at least one court action in the past year.
The firm notes that the trend towards greater mediation in UK
legal cases following the Woolf Reforms may explain the fact that
UK companies (23% of companies surveyed) are much more likely than
US companies (13%) to settle matters before court proceedings
begin.
Approximately 60% of UK companies (compared with 51% in the US)
have resolved disputes in a multi-step process that entails direct
negotiations between senior executives, mediation and arbitration.
Larger companies in particular (94% of companies surveyed) believe
that cost savings can be made through dispute escalation.
Fulbright canvassed the views of 354 in-house lawyers, including
50 from the UK, in researching its 2005 Litigation Trends Survey.
It found that both US and UK firms are increasingly concerned about
the trend towards more litigation, particularly in relation to
costs.
Lista Cannon, head of European disputes at Fulbright &
Jaworski, said: "The concern over litigation costs is certainly one
point where there is trans-continental agreement. Although the
UK system of requiring the losing litigant to pay the winner’s
costs can help prevent frivolous litigation out of fear of bearing
the other side’s legal bill, our report indicates real concerns
over spiralling fees still exist among UK businesses. This anxiety
can only be compounded by the increasing number of court actions
they anticipate facing."
Other findings
Larger organisations and businesses in the property, insurance
and healthcare sectors are the most likely to face court actions.
Companies with $1 billion or more in annual revenues face more than
20 times the number of court actions brought against the smallest
companies and almost four times the number faced by medium-sized
companies.
The average company with US$1 billion in gross revenues faces
more than 147 cases at any one time, according to the report.
The most costly type of litigation for companies in the
manufacturing, energy and technology/communications sectors relates
to intellectual property, while personal injury litigation and
regulatory matters were rated second and third by the energy
industry.
Technology and communication companies in the UK see their
biggest risks as coming from IP and employment cases, while UK
manufacturing and insurance companies were more concerned about the
rising trend in group and class actions.
Electronic discovery of evidence is becoming a significant
burden in the US, and is beginning to appear on the radar of UK
organisations too.
Three-quarters (74%) of all companies surveyed have "litigation
hold policies" in place. These evoke immediate suspension of any
scheduled destruction of records in the event of anticipated
litigation. Four in five (82%) have "written records retention
policies" in place.
